Picking a savings account

Each year CANSTAR researches a multitude of savings accounts on the market, to determine which organisations offer outstanding value for Australians. This year CANSTAR is pleased to congratulate BOQ on taking out the Bank of the Year – Savings award for 2014.

CANSTAR caught up with Debra Forster, BOQ Head of Deposits, for some tips on what customers are looking for in a savings account.

Q: BOQ offer a particularly competitive rate on its WebSavings account. Have you seen an increase in the use of online saver accounts (as opposed to term deposits) over the past few years?

While we offer particularly competitive WebSavings Accounts, we believe that our market competitive term deposits continue to offer customers outstanding value for money, particularly for those customers who require rate certainty over a fixed term.   For retirees Term Deposits give peace of mind through a secure income stream in retirement.    Term Deposits are also a great option for first home savers, as funds are locked in and the temptation to dip into the funds is reduced.  However, as interest rates have decreased in line with the RBA cash rate we have noticed a trend towards at-call deposits, which give customers greater flexibility to access funds.

Q: When deciding between a straight online savings account and a bonus saver account, what considerations should customers weigh up?

In forming a cash investment strategy we would suggest that customers consider their need to access funds, versus their need to earn interest and the period of time they are likely to hold the funds in cash investments.  Online Savings Accounts generally provide eligible customers with a short term introductory special rate, which then reverts to a lower variable base rate.   These Introductory Special Rates can be a great option for customers who are looking for a higher return over a short period of time.   On the other hand bonus saver accounts pay bonus interest based on the customer meeting certain monthly criteria.   These accounts can be great for customers who are looking to save and invest money over a longer period of time. Unlike many other Bank’s bonus saver accounts that pay bonus interest in months where customers make no withdrawals and meet certain deposit criteria, our Bonus Interest Savings Account rewards customers with bonus interest provided no more than (1) withdrawal is made during a calendar month.   We believe this unique feature gives our bonus saver customers greater flexibility and choice to access their funds once a month, without losing bonus interest.

 Q: I note that BOQ was recently inducted into the Queensland Business Leaders Hall of Fame. Can you tell us a little bit about that?

The Queensland Business Leaders Hall of Fame remembers, recognises and retells the stories of business and individuals who have played a vital role in the state’s business landscape. BOQ was recently inducted into the Hall of Fame to recognise its status as a long-standing institution that has loyally served Queenslanders throughout the state’s history and one that has successfully expanded and adapted to meet customers’ changing needs.

BOQ was established in 1874 as the first permanent building society in Queensland – it was the first bank in Australia to have an interest bearing check account and was also the first to appoint a female branch manager.  Today BOQ is a listed company with a market capitalisation of around $ 4 billion.  It employs more than 2,500 people and has operations throughout Australia.

Readers can download the Savings Award report here.

Picking a savings account